As published in Crain’s Op-Ed Section on 4/10/2018:
Chicago’s workers are making less money than they could, and that won’t change unless we figure out how to keep women in the workforce.
According to a recent study by University of Akron assistant professor Amanda Weinstein, local wages—for men and women—rise when more women enter the workforce. Weinstein examined women’s labor force participation rates in 250 U.S. cities in 1980. She found that every 10 percent increase in female labor participation in 1980 led to a 5 percent increase in hourly real wages—the amount workers take home after accounting for inflation—between 1980 and 2010. For many cities, including nearby Minneapolis and Madison, Wis., higher levels of female workforce participation in 1980 have translated into higher wages today. Unfortunately, Chicago, which had a 53 percent female workforce participation rate in 1980, saw a decrease of 9 cents per hour in real wages.
Nationally, fewer women are working, with their labor force participation rate decreasing by 3.5 percentage points from 2000 to 2016. In Illinois, women’s labor force participation fell below 60 percent in 2015. If this trend continues, it could have serious economic implications for all Chicago workers.
We need to explore the causes for this drop and find real solutions to keep women in the labor force. There are likely many factors pushing them out, like lack of opportunity, poor work-life balance and limited maternity leave. Then there’s society’s continued undervaluation of female employees. Today is Equal Pay Day, the date that marks how far into the year women must work to earn what men earned the year before. Nationally, women are paid 72 cents for every dollar a man makes. In Illinois, we’ve fared better, earning 79 cents, but that is still far from equal.
Lack of female leadership and support for female entrepreneurs contributes, too. The World Economic Forum found that women made up less than 50 percent of the leadership in every industry analyzed in its 2017 Global Gender Gap Report, but when women were in leadership positions, they were more likely to hire women. At the Women’s Business Development Center, we see this every day as we work with female business owners who hire more women and diverse employees to build thriving companies.
This is not about parity for parity’s sake. As Weinstein’s research suggests, keeping women in the workforce ultimately improves wages for all workers. That means more women—and men—walking around with more money to spend on goods and services, boosting the Chicago economy as a whole. The economy benefits, too, when businesses can hire from a larger labor pool, picking the best talent to make their organizations thrive. Having women in the workforce, including the C-suite, is better for business and better for the economy. When we don’t invest to make it happen, our city leaves money on the table.
Emilia DiMenco is chief executive Officer of the Women’s Business Development Center.
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